Ten companies have been fined for malpractice in past mergers and acquisitions deals, according to a statement from the State Administration for Market Regulation (SAMR) on Friday. Among them are some of China’s biggest tech behemoths including Baidu, Tencent, and Didi Chuxing.
Each company has been fined 500,000 yuan ($77,000) – while a seemingly small amount given the size of the companies, is the largest penalty legally permissible under relevant laws. The move marks Beijing’s determination to tighten its grip on the country’s rapidly growing tech sector, and is in line with the 2021 agenda of China’s top antitrust regulator.
The social media giant Tencent, for example, received a fined for acquiring online education firm, Yuanfudao. The search engine company Baidu has also been fined for an acquisition deal with Ainemo, a hardware start-up specializing in home robots. The ride hailing app Didi Chuxing and ByteDance-backed Liangzi Yuedong Technology, on the other hand, incurred fines for setting up joint ventures with financial institute Softbank and media firm Shanghai Dongfang Newspaper, respectively. All deals were found to have violated antitrust laws by failing to seek approval before the transactions were made. However, none of the deals were found to be anti-competitive, the statement adds.
The country’s top financial regulators have been sending similar signals since the crackdown on fintech Ant Financial in October of last year. By blocking what stood to become the world’s largest IPO, officials in Beijing indicated their determination to curb the market power of the country’s big tech firms. In a January interview with Xinhua, the head of SAMR Zhang Gong said that the regulator will step up efforts to “prevent the disorderly expansion of capital.”
In a statement issued Friday, Tencent said it would “continue to adapt to changes in the regulatory environment and will seek to ensure complete compliance.” Other companies have not responded to SAMR’s decision.